Our View: School sales tax: No

Tuesday

Mar 11, 2014 at 9:03 PM

One important thing voters need to know about next week’s sales tax increase referendum for school facilities in Peoria County is that they could end up paying more tax on a restaurant meal in Peoria than they would in Chicago’s Loop, in downtown Manhattan, in Los Angeles.

Indeed, should the 1 percentage point sales tax hike pass, that surcharge will rise to 11.25 percent in most of the city, to 12.25 percent in the Downtown Hospitality Zone that includes Main Street. By comparison, according to the latest figures we’ve seen, that tax is 10.5 percent in Chicago, 8.875 percent in New York, 9 percent in L.A. The tax on a Peoria cheeseburger might well top the nation. Peoria has some very fine restaurants, but we’re not sure fine enough to continue drawing customers who can cross the river and pay 8 percent on a meal in most of East Peoria, 9 percent in part of that city’s Levee District.

Overall, the sales tax on most purchases — excluding groceries, medicines and big-ticket items such as vehicles — would climb to 9.25 percent, easily tops in the region. Competitive disadvantage is one major reason voters in Peoria County should be wary of this referendum. There are others.

To be sure, passage would generate an estimated $18 million annually for Peoria County schools, distributed based on enrollments, and many could benefit — District 150, for example, ranks more than $40 million in heating and air conditioning needs first on its list, Dunlap more and/or larger schools to accommodate its growth. The revenues are restricted to facilities costs that include bricks and mortar, land acquisition, architects’ fees, paying down previous borrowing, etc. Most would agree that a consumption tax — a tax of choice that spreads the burden to people outside the county as well — beats the property tax. School officials say the help for the capital side of the budget could ease the pressure on operations, perhaps even reduce the property taxes residents pay, though we tend not to hear public guarantees of that. A 2007 Illinois law permits this, and at last count 19 Illinois counties had adopted it (with 34 saying no can do). Fulton County has a ballot measure, as well.

On the flip side, this is a forever tax, with local school board members forgiving members of the public who suspect this is just one more license to spend whether they really need to or not. Schools have an alternative when they wish to build: They can seek their residents’ permission through property tax referendum, which ensures a measure of ongoing taxpayer control. In most cases here the locals are being asked to dig deeper with no specific idea of how the money is to be spent. The recession of a lifetime may be over, but the stagnation of middle class incomes is an ongoing story. There’s a limit to how much more they can be tapped without it becoming counterproductive. That may explain why Peoria Mayor Jim Ardis is among those municipal officials opposed.

This referendum has flown under the radar. Consider it one more reason to vote. Twice — in 2009 and 2013 — we found fault with the same measure in Tazewell County. Consistency demands we do so again. No to the school facilities sales tax.